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Who knew that Leech was also astonishingly prescient about political performances?

Three weeks ago he warned about politicians stoking “pension envy” — by driving a wedge between the pension haves and have-nots. Looks like Tim Hudak missed that Nov. 7 speech.

On Nov. 19 the Tory leader unveiled his latest ideas for pension reform based on the very premise Leech warned against: Envy.

I argued last week that Hudak is wrong to propose the end of pension plans as we know them for all newly hired public servants. But Leech, I’m embarrassed to admit, was one step ahead of me with his political foresight (even though his day job is running a $117-billion pension plan for 300,000 members).

“Let me . . . sound a word of caution: We must not allow ‘pension envy’ to define that debate,” Leech said. “There is a danger that this could happen, however, as the private sector increasingly moves toward Defined Contribution plans, and away from the Defined Benefit model, claiming it is unaffordable. And politicians start embracing this idea to grab headlines.”

“Our pension system should be fair, not gold-plated for some and non-existent for others,” he began (my italics). “Generous plans are the norm for many government employees while a majority of workers . . . have no access to a workplace pension at all.”

The Tory plan is to end all Defined Benefit pensions for future public servants, offering them the Defined Contribution plans that are sweeping the private sector. For people without workplace pensions, he would offer Pooled Registered Pension Plans, which are of course a misnomer.

I call these “pretend pensions.” A true pension pays you a reasonably reliable income upon retirement, diversifying investments and pooling the contributions of other workers — young and old — to smooth out any market gyrations when the time comes to collect. In other words, a defined benefit.

So-called Defined Contribution plans are merely glorified RRSPs — they make no pretense to paying a reliable pension. The only certainty is that they will make future retirees poorer and investment advisers richer (thanks to fat management fees), while leaving all of us more exposed to the inevitable social costs of dealing with a wave of financially exposed seniors.

They work “exactly the same way as an RRSP,” Leech explains. “The day you retire, you open the box to see how much money you have to live on for the rest of your life. If markets have been bad, your retirement lifestyle will be less than if markets have been booming.”

His bottom line: “It is still too much of a lottery.”

Compare that to a true pension fund: Teachers’ has an enviable (Attention Tories: Envy alert!) 8.4 per cent return over the last decade. Its administrative fee of 0.5 per cent is far lower than the typical 2 per cent charged by private sector managers whom the Tories are extolling.

Dismantling our public pension plans and giving more business to Bay Street would only atomize our retirement security, making it costlier and riskier.

When we spoke Wednesday, Leech asked, rhetorically: “Do I want to turn all the teachers of Ontario into day traders? No.”

The result would only be “a great windfall for banks and insurance companies” at the expense of people’s retirement security, he added. Instead, Leech leans toward some enhancement of the Canada Pension Plan (which I argued last week is a real defined benefit plan, with low management fees and outstanding returns, that could pick up some of the slack).

Why is Hudak so eager to throw the pensioner out with the bathwater, only to leave fund managers swimming in more money? Here’s one explanation: A grateful Bay St. would surely boost fundraising for the Tories, even while impoverishing the rest of us.

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